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Tuesday, 29 January 2013

Attacks on EAS budget support policy

The European External Action Service (EAS) was criticized for offering financial support from its own budget to overseas aid.
A report drafted by the European court of auditors describes the budget support as a "particularly problematic area". Followingly, an MEP - Derk Jan Eppink- joined the critic pointing out that funds offered to Tunisia and Egypt (€60m, respectively €100m) in the form of budget support from the European neighbourhood policy in 2009 ”should never have been given”.
Additionally, concern has been voiced also about the quality of the cooperation between the EAS and DEVCO (Development and Cooperation – EuropeAid  Directorate–General)- “I am also very worried that there might be insufficient oversight of the management practices within EAS delegations across the world which have given rise to reports of significant mistakes in procurement procedures and taxation management”, MEP Ryszard Czarnecki, rapporteur for the report commented.
However, two weeks after these attacks Oxfam's EU policy expert, Catherine Olier, defendsthe budget support, describing it as a "well-established aid financing modality" , having "proved efficient for poverty eradication".
Olier argues, that the budget support has, for example, contributed "significantly" to a decline in poverty in Tunisia from 6.2 % in 1995 to 3.8 %  ten years later. Oxfam goes on by underlining the comparative advantage of these money: "Compared to aid earmarked for projects, it is shown to improve public services like health and education by improving public expenditure. Also, when these services are paid for out of general budget, they are more likely to continue when aid is withdrawn than those which have a separate funding stream. Budget support is an effective tool to improve financial management and build strong and accountable states."

Source: The Parliament